The expected federal guidance on how banks should deal with legal marijuana businesses is little more than a misguided effort to “change water into wine,” the state’s largest banking association says.

“The only real solution is an act of Congress, which isn’t likely in the near future, though needed,” Colorado Bankers Association president and CEO Don Childears writes in an opinion piece submitted to The Denver Post.

Bankers have been increasingly wary of offering services to marijuana businesses — most will not, and those that do are quiet about it — because federal laws still list marijuana as an illegal drug in the same manner as heroin and cocaine.

Federal authorities have indicated that “yellow-light” guidance was likely forthcoming from the U.S. Department of Justice, which prosecutes drug violations, and the U.S. Department of the Treasury, under whose authority banking regulators reside.

Legal-marijuana advocates were bolstered by U.S. Attorney General Eric Holder’s statements at the University of Virginia in January that policy adjustments were being discussed to deal with the unintended clash between state and federal laws: piles of cash lying around because marijuana businesses cannot bank.

In a separate four-page position paper, the CBA outlines the variety of issues bankers face in doing business with marijuana shops.

Guidance “cannot change the fact that marijuana is against federal law,” the CBA says in the paper. “It cannot change water into wine.”

And any guidance is not enough to move bankers from their leery seats, Childears said in the opinion piece, which is as yet unpublished.

“Bankers face criminal and civil penalties should they fail to act on their suspicions” of reporting financial transactions from known illegal businesses under federal law, such as marijuana shops, Childears writes. “These laws simply can’t be swept aside.”

The issue, Childears writes, is that the authority over banks is not a prosecutor’s choice to look the other way but rather regulators who wield a weightier level of power.

“Regulators can impose various civil money penalties, cease and desist orders, fines and can ban bankers from their careers for life, should they violate federal law,” Childears writes.

That means bankers aren’t likely — though some have expressed an interest — to bank marijuana businesses no matter what policy shift occurs from Holder’s forthcoming statement.

David is a member of the Investigations Team and has been at The Denver Post since 1999. He was a founding member of the team before moving on to cover banking, finance, human services, consumer affairs, and business investigations. He has also worked at newspapers in New York, St. Louis and Detroit over a 35-year career.

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